Tricare fee hikes, small pay raise don't faze senators

Apr. 22, 2013 - 11:48AM
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Sen. Kirsten Gillibrand, D-N.Y., said she is 'personally very skeptical' about DoD plans to raise Tricare fees for retirees, and criticized the 1 percent pay raise for troops for not keeping up with private-sector salaries. (Mike Groll/The Associated Press)

Military advocates are again appealing to Congress to protect pay and benefits by contending that the sacrifices of military service justify special treatment — but there are signs that argument may be losing effectiveness.

Military advocates are again appealing to Congress to protect pay and benefits by contending that the sacrifices of military service justify special treatment — but there are signs that argument may be losing effectiveness.

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Military advocates are again appealing to Congress to protect pay and benefits by contending that the sacrifices of military service justify special treatment — but there are signs that argument may be losing effectiveness.

With spending cuts underway across the federal government and some new lawmakers involved in oversight of the defense budget, there appears to be less support for protecting pay, allowances and health care from major cuts.

Sen. Kirsten Gillibrand, D-N.Y., the new chairwoman of the Senate Armed Services Committee’s personnel panel, said April 17 she is “personally very skeptical” about Defense Department plans to raise Tricare health insurance fees for retirees, and that the 1 percent across-the-board pay raise proposed by the Defense Department was “regrettably” less than the 1.8 percent raise needed to keep pace with private- sector salary growth.

But, she made no promises to protect the programs, noting only that the Obama administration’s 2014 budget request reflects “difficult choices” that her panel will have to review.

Gillibrand’s predecessor — Marine Corps veteran Sen. Jim Webb, D-Va. — was a champion of military pay and benefits, especially retired pay. Webb, who grew up in a military family and said he saw affordable health care as an unbreakable contract, did not seek re-election last year.

Sen. Lindsey Graham, R-S.C., the personnel panel’s ranking Republican, is an Air Force Reserve colonel about two years from retirement and a longtime champion of military benefits. But like Gillibrand, Graham also didn’t promise to protect the status quo.

On Tricare fees, he said he would support “gradual premium increases” because his concern is the future of the military health care system.

“I am looking for a quality benefit that is sustainable,” he said, adding that affordability was one of his priorities.

Their comments came at a hearing in which DoD’s acting personnel chief said the tough decisions on personnel benefits were forced by tight budgets.

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“We had to strike a balance,” said Jessica Wright, acting undersecretary of defense for personnel and readiness, calling it a “collective” and “really hard” decision by defense and service leaders.

'That is not a raise'

Also appearing at the hearing were representatives of the Military Coalition, an ad hoc group of more than 30 military and veterans groups that has been the guardian of military compensation since its formation in 1986.

Steve Strobridge of the Military Officers Association of America, a coalition co-chairman, said the capped 1 percent pay raise is |a bad signal to send to troops during wartime and ignores a key lesson of the all-volunteer force: Nothing good comes of trying to save money by capping pay raises.

In the 1970s and again in the late ’80s and early ’90s, DoD proposed and Congress approved pay raises that were below average private-sector wage growth. Both times, Strobridge noted, the military ran into serious recruiting and retention trouble that caused readiness problems.

“History shows that once military pay raise caps are implemented, the tendency has been to continue them until retention problems arise, which then have to be addressed through significant pay raise plus-ups,” he said.

Many troops will view the 1 percent raise, which would be the smallest in more than 50 years, as a pay cut because the value of compensation is measured by the effort required to earn it, Strobridge said.

If pay rises by 10 percent but the effort to earn it rises by 50 percent, “that is not a raise,” he said.

Coalition representatives also made clear they oppose DoD’s newest idea for passing health care costs on to beneficiaries based on how much retired pay they earn. The result is that about $25 billion over 10 years would be passed on to beneficiaries, with annual out-of-pocket fees increasing by $1,000 or more over five years.

Coalition members said no other federal employees have income-based fees for health care. Moreover, Strobridge said, military retirees “pre-pay huge upfront health premiums through 20 to 30 years of service and sacrifice.”

A 1 percent military raise — rather than the 1.8 percent raise due to service members under current federal pay law — would save $540 million in fiscal 2014 and $3.5 billion over the next five years, Wright said.

DoD’s proposed Tricare fee hikes would yield $900 million in savings in 2014.

If Congress doesn’t approve these cuts, lawmakers will have to cover the cost of putting the expenses back in the budget.